Air France-KLM to bid for Alitalia

After months if speculation among industry analysts, it has finally been officially confirmed that Air France-KLM is interested in purchasing

Alitalia, Italy’s struggling national carrier, and that it will seek to participate in the bidding process. The news comes at a critical moment for the Italian government, which has been trying to sell its stake in the debt-ridden, deficit producing airline since June 2007, but has had a very challenging time at it. Earlier this week Lufthansa, which had been seen as a serious contender for the carrier, announced in no uncertain terms that it was not interested in the airline. This leaves Air France-KLM as the most serious potential buyer.

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France’s spokespersons asserted that their goal was to ensure that Alitalia “reclaims” the Italian air travel market, where the national carrier has been squeezed in recent years by the appearance of smaller, discount airlines. The Franco-Dutch group—continental

Europe’s largest airline—also noted that it would try to improve Alitalia’s fortunes by using the carrier’s strong name and brand recognition to attract more passengers. The AF-KLM news release also speaks about “asserting” Alitalia’s “national identity.” This should serve as welcome news for both the Italian government and unions, both of which have been adamant that Alitalia remain the country’s flag carrier and that even if it falls into the hands of foreign owners, it should retain its current status.

Air France-KLM’s public expression of interest in the airline made Alitalia’s shares increase by over 4.5% on the world market, as investors began to regain hope that there may still be a future for the troubled carrier.

www.airfrance.com